But the talk that the rate of 6% for the bailout was "punitive" is simply ridiculous. It should even be higher because Ireland is not credit worthy. If the Irish don't like it, why don't they borrow at the market...oh I forgot, there the rate would be 9% (see article above).

@Rene Kim
To stop all the current transfers in the EU is a very good idea.
But if a new transfer would be introduced, like guaranteeing all the debt for everyone this would be much more expensive for countries like Germany (paying higher interest rates). It would be a system without any incentive to have a responsible budget policy.
It would not stop "market distortions" but would be a distortion in itself.

"give it enough time to work"?????................clearly this is the strategy, only now we are talking decades..... with the ultimate hope that some "miracle" will eventually come along and save everyone!

If it was possible to avoid the pending EU carnage by letting little Ireland and Greece default, it would already have been done. What is being done now is attempting to keep the entire EU from following the PIGS into the abyss that has been reserved for them.

Why not replace the current agricultural subsidies and structural fund wealth transfers in return for a union in which countries guarantee each other (with strict supervision obviously)? We're talking same order of magnitudes in the end. And it would stop the ridiculous market distortion, that hit developing countries especially.

Default isn't a cheap and easy answer: the PIGS are running deficits, and hence need to borrow new money in the markets. A default would surely raise the cost of borrowing this new money. The right answer is the existing plan - we just need to be patient and give it enough time to work.

Both of these need to be purchased back at current market rates (circa 30cents in the euro) or else written down coercively. Currently the EU/IMF are preventing this as part of their punitively expensive loan to Ireland to try to prevent contagion in the EU- it needs to be allowed fast! If the EU wish to prevent contagion they should pay for that luxury themselves (i.e. 330 million pay for this rather than 3million!!)

Both of these sets of debt need to be restructured as does the ill conceived Irish government gurantee itself, so that bank bondholders are converted to share holders like in any other corporate restructuring.

Finally the rate of interest that Ireland is paying for the EU/IMF loan of 6.1% is totally unsustainable and punitive(& twice the cost of funds) and needs to be renegotiated fully over time to more real levels.

Ireland at its weakest point in economic history has been coerced into a terminally econoimic suicidal deal with the EU/IMF that ironically is no one's long term interest. (i.e. would a sovereign default suit the EU better -I think not). Clearly Ireland needs to persuade interests in Europe that allowing capitalism to work and not socialising banks losses on a small 3m population in the western EU in the name of preventing contagion is in nobody's interest mid-long term. The clock is ticking on common sense.